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Wealth, Warmth and Wellbeing: Whether Happiness is Relative or Absolute Depends on Whether it is About Money, Acquisition or Consumption

Journal of Marketing Research, 2009

15 Pages Posted: 5 Nov 2008 Last revised: 12 Apr 2016

Christopher K. Hsee

University of Chicago - Booth School of Business

Yang Yang

University of Florida

Naihe Li

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Luxi Shen

University of Chicago - Booth School of Business

Date Written: October 30, 2009

Abstract

A central and still open question in consumer and happiness research is whether happiness depends on absolute or relative levels of wealth and consumption. To address this question the authors go to a finer level than overall happiness and distinguish three types of happiness: happiness from money (monetary experience), from acquiring an item (acquisition experience), and from consuming an item (consumption experience). They find that monetary and acquisition experiences are relative but consumption experience can be absolute. The authors further distinguish consumption as being inherently evaluable (such as the temperature of bathwater) or inherently inevaluable (such as the size of a diamond), and find that inherently evaluable experience is absolute, while inherently inevaluable experience is relative. Including both experimental and field data, this research suggests that raising the wealth of all can possibly raise the happiness of all if attention is focused on consumption rather than on money or acquisition and wealth is spent on improving inherently evaluable rather than inherently inevaluable consumption.

Keywords: happiness, money, acquisition, evaluability, relative vs. absolute

JEL Classification: D81, D11, D12, D91

Suggested Citation

Hsee, Christopher K. and Yang, Yang and Li, Naihe and Shen, Luxi, Wealth, Warmth and Wellbeing: Whether Happiness is Relative or Absolute Depends on Whether it is About Money, Acquisition or Consumption (October 30, 2009). Journal of Marketing Research, 2009. Available at SSRN: https://ssrn.com/abstract=1292175 or http://dx.doi.org/10.2139/ssrn.1292175

Christopher K. Hsee (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Yang Yang

University of Florida ( email )

PO Box 117165, 201 Stuzin Hall
Gainesville, FL 32610-0496
United States

HOME PAGE: http://www.andrew.cmu.edu/user/yy1/

Naihe Li

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

No.535 Fahuazhen Road
Shanghai Jiao Tong University
Shanghai, Shanghai 200052
China

Luxi Shen

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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